Pleanswer 6 as its part of 5

5. Compute the value of a bond with a typical $1000 par value, a coupon rate of 2.25% with semi-annual payments, and a 30-year maturity if investors required a yield to maturity of 1.08% on the bond (or 108 basis points).

1. 1000*0.225*1/2 = $11.25
2. 0.0108*1/2 = 0.0054
3. (-PV(rate,nper,pmt,fv))
4. (-PV(0.0054,60,11.25,1000))
5. = $1,299.13

6. Compute the value of the bond in b.5 if investors suddenly required a yield to maturity of 0.036% on the bond (or 360 basis points).

7. Compute the value of the bond in b.6 if there is a change of 48 basis points in the required yield due to a fall in the default risk of the debtor (where 1 basis point=0.01%, so the change is 0.48%)

8. Compute the value of the bond in b.6 if the bond is callable (without a make-whole call feature) and there is a change of 36 basis points in the required yield due to a rise in the chance of the debtor prepaying the principal of the bond (where 1 basis point=0.01%, so the change is 0.36%)